The industry’s move to raise tariffs will ultimately benefit the customer and the government, Cellular Operators Association of India (COAI) said, adding that revenue generated from higher plans will be ploughed back into improving customer experience, network quality and investment into new technologies.
“Customers have had a pretty good ride for the past couple of years, but even with the tariff increase, they will be paying less than what they were paying four years ago,” Rajan Mathews, director general of COAI, told ET.
In a letter to telecom secretary Anshu Prakash, COAI said that in case of data, consumers will pay about Rs. 11 per GB, which is higher than Rs. 7.7 per GB that they were paying till now, but it is far lower than Rs. 225 per GB in 2015 and Rs. 333 per GB in 2010. At Rs. 11 per GB, the rate still remains far less than global average of $8.5 per GB.
COAI said overall APRU has come down from Rs. 141 in 2010, to Rs. 118 in 2017 and to Rs. 80, citing Trai data. “We do not find the reported tariff increases to impact affordability negatively, as the majority of present customers were paying well in excess of this amount with substantially less consumption of voice minutes and data,” COAI said.
COAI represents Reliance Jio, Bharti Airtel and Vodafone India which Sunday said will increase tariffs by up to 50% this week.
Mathews said that users will ultimately gain from improvement in customer experience, quality of service through network upgrades, video streaming and new technologies such as Internet of Things and 5G, while the government will get a share of the rising industry revenue.
“More revenue for the industry means we can hire more, vendors can expect timely payments, we can borrow more from banks and attract foreign investment which has been languishing,” Mathews said. He said a 10% increase in broadband penetration gives you a 3% to 4% lift in GDP.
“When the GDP has been slipping, what better way to give it a boost than to invest in your telecom networks?” The lobby group, however, flagged issues of spectrum auctions and statutory dues from adjusted gross revenue (AGR) while asking government to look at lowering licence fee, cutting spectrum usage charge, reducing GST on spectrum payments and refunding GST credit.
“AGR issue is over Rs. 1 lakh crore, spectrum auctions, investment into future technologies… these are going to be continuous pressures of the industry,” he said.
On being asked if after the hikes, whether the industry will be financially stronger to take part in spectrum auctions, including of 5G, Mathews maintained that the spectrum prices were unsustainable and payments that need to be made upfront would push the telcos further into debt.―Gadgets Now